Homeownership: More Than Money

Our focus for this article will not be the investment aspects of real estate. This is not to say that we think that homes have ceased to be a solid investment. One must remember that even with the volatility of home values over the past decade, homes have more than tripled in value since 1980. Then there are the tax benefits of owning a home…and also the fact that home mortgage payments do not increase as quickly as rent, making the home a good hedge against inflation. While many analysts expect rents to continue to rise over the next several years in response to increased demand, it remains clear that, in the long run, real estate will still be an important part of any financial plan.

Rather than focusing on the economic advantages of homeownership, today, we re-examine the psychological benefits. In a national survey conducted by mortgage giant Fannie Mae regarding home ownership, among other findings, they learned that Americans would typically choose to work an additional decade in order to become a homeowner. Our interpretation of this answer really helps us see that there is more to homeownership than money.

Some time ago, an article appeared on the internet in The Montpelier Pride that serves as a strong reminder that the dream of homeownership extends far beyond dollars and cents. The article was written by a single mother, Dorl Oatley, who worked for a non-profit in a high cost of living area–Montpelier, Vermont. Its editor noted that Ms. Oatley writes about the thrill, pride and satisfaction of owning her own home. Here are a few quotes from the story:

“Homeownership is a wonderful experience. The stability that owning a home offers a family is invaluable. To realize that in a year, you will be here…that this first Christmas or this first birthday celebrated here will be the beginning of many provides a feeling of consistency and a sense of home that is hard to describe. As a renter, between rising costs or a landlord’s decision to remodel or sell, I had moved a lot and never knew whether I would be celebrating the next year’s milestone in the same home…The opportunity to start a stable home for my daughter who is now thriving in middle school, is a wonderful blessing…there comes with owning a sense of pride that caught me off guard. I have given more attention to the aesthetics both inside and outside the home since I have become a homeowner.”

Stability. Pride. Control. Permanence.

These are all words that homeowners would use in describing their experience. For example, for a homeowner, the feeling of control may mean the ability to paint your walls a certain color and be free of increases in rental costs or forced moves.

There is no doubt that those of us who are homeowners understand these feelings. It is one of the reasons that many immigrants want to come to our country. It is not only because the country is wealthier and perhaps may have more political and personal freedom, but also the fact that, in many countries, homeownership is not possible.

Sometimes Americans take the right and ability to own a home for granted. Not so with immigrants. The financial crisis we previously experienced was an opportune time for all of us to take a second look at these benefits. As a matter of fact, as many have fallen behind with regard to their financial goals; being able to save their home was of primary importance from a psychological perspective. It is one thing to postpone retirement. It is quite another to change status from homeowner to renter at the same time, losing control of many other aspects of one’s life.

The government has taken actions to shore up the financial systems of this country to prevent future calamity. As they changed the rules, we can still see that facilitation of the American Dream of Homeownership is still a major goal of our government. The freedom and means to own a home is ingrained in our systems of democracy and capitalism.